Correlation Between Dunham Emerging and Aqr Large
Can any of the company-specific risk be diversified away by investing in both Dunham Emerging and Aqr Large at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Dunham Emerging and Aqr Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dunham Emerging Markets and Aqr Large Cap, you can compare the effects of market volatilities on Dunham Emerging and Aqr Large and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Dunham Emerging with a short position of Aqr Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Emerging and Aqr Large.
Diversification Opportunities for Dunham Emerging and Aqr Large
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dunham and Aqr is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Emerging Markets and Aqr Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Large Cap and Dunham Emerging is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Dunham Emerging Markets are associated (or correlated) with Aqr Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Large Cap has no effect on the direction of Dunham Emerging i.e., Dunham Emerging and Aqr Large go up and down completely randomly.
Pair Corralation between Dunham Emerging and Aqr Large
Assuming the 90 days horizon Dunham Emerging Markets is expected to under-perform the Aqr Large. But the mutual fund apears to be less risky and, when comparing its historical volatility, Dunham Emerging Markets is 1.07 times less risky than Aqr Large. The mutual fund trades about -0.1 of its potential returns per unit of risk. The Aqr Large Cap is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 2,395 in Aqr Large Cap on September 1, 2024 and sell it today you would earn a total of 186.00 from holding Aqr Large Cap or generate 7.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Dunham Emerging Markets vs. Aqr Large Cap
Performance |
| Timeline |
| Dunham Emerging Markets |
| Aqr Large Cap |
Dunham Emerging and Aqr Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Emerging and Aqr Large
The main advantage of trading using opposite Dunham Emerging and Aqr Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Emerging position performs unexpectedly, Aqr Large can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Aqr Large will offset losses from the drop in Aqr Large's long position.| Dunham Emerging vs. Aqr Large Cap | Dunham Emerging vs. Qs Large Cap | Dunham Emerging vs. T Rowe Price | Dunham Emerging vs. Pace Large Growth |
| Aqr Large vs. Aqr Large Cap | Aqr Large vs. Aqr International Defensive | Aqr Large vs. Aqr International Defensive | Aqr Large vs. Aqr Long Short Equity |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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